Developer requests $2 million for new subdivision

A developer planning to build a new subdivision in Franklin is requesting $2 million in tax dollars to help start the neighborhood.

That money would cover 25 percent of the costs to help pay for building roads and extending sewers for the 149-lot Hillview subdivision on Upper Shelbyville Road, developer John Grimmer said. The Franklin Redevelopment Commission is considering the request.

The money would come from the city’s tax-increment financing, or TIF, districts, which set aside property taxes collected from new construction to be used for economic development. Neither Franklin nor Greenwood has ever spent TIF money to aid a residential development.

The subdivision would include 38 smaller, cottage homes marketed to retirees and empty-nesters, while the remaining lots would be for upscale homes costing about $400,000, Grimmer said. Hillview would be the first new subdivision in Franklin since 2004.

Development costs for the subdivision will total $8 million for land costs, engineering and legal fees, site preparation, road building and sewer installation, Grimmer said. That amount turned out to be higher than he initially thought, and the money from the city would allow him to continue developing the area and keep costs down for buyers, Grimmer said.

Grimmer said he might have to abandon plans for the subdivision if he doesn’t receive the funding from the city. He has spoken with other groups interested in the land, including a farmer who would plant the land or two residential developers who likely would develop lower-cost houses than what he has planned, he said.

About Hillview

John Grimmer is planning to develop a new subdivision on Upper Shelbyville Road in Franklin and is asking for the city redevelopment commission to provide $2 million to help him put in new roads and sewer lines. Here’s a look at Hillview:

Builders: Gene Perkins would build cottage homes, other lots would be open to custom builders.

Total development cost: $8 million

Site work: Will be completed by Mike Duke of Duke Homes.

Request: $2 million in tax-increment financing funds. Would be used for infrastructure, including roads and sewer lines.

Redevelopment commission members haven’t decided whether to commit any money to the Hillview project and will discuss the proposal more in December.

Grimmer plans to market the subdivision as high-end housing for Franklin, with the no-maintenance cottages selling for $250,000 to $300,000 and the single-family homes in the $400,000 price range, he said. Grimmer’s partner Gene Perkins would be the builder for all of the cottage homes, while the other lots would be open to custom builders, Grimmer said.

The $2 million he requested from the city board would go toward building roads in the subdivision and putting in sewer pipes. The site preparation and infrastructure work would be done by Mike Duke of Duke Homes.

The new homes would bring in more tax money to the city and could draw company executives and residents with higher incomes, Grimmer said. The subdivision also would include a park, and he said he would extend the city’s trail system through the new neighborhood.

“There shouldn’t be any hesitation in using TIF dollars for this project,” Grimmer said.

Ted Shuel, who developed Maclaren Manor and Heather Glen at The Legends, asked redevelopment commission members not to give money to his competitor for a project that would benefit Grimmer’s profit line.

The subdivisions Shuel developed are still being built and offer upscale homes similar to what Grimmer is proposing. Shuel’s group put about $7 million into developing the subdivisions, which sat empty when the recession hit in 2008. Building has just started to pick up again.

Starting a subdivision is a money-making business, and helping a developer cut costs benefits the developer more than it benefits the rest of the community, he said.

“It’s a slippery slope. Where do you then draw the line and the next guy who comes in and wants to help his bottom line? John Grimmer may be in a TIF district and I’m not, but does that benefit all the residents of Franklin? I don’t think so. That benefits one small group,” Shuel said.

If the housing market slows again like it did during the recession, the city could spend $2 million and not get any new tax revenue for years if no houses are built, Shuel said.

Once fully built, the subdivision could generate an extra $250,000 to $300,000 in tax funds per year, which could reduce property taxes for all city residents, Mayor Joe McGuinness said.

McGuinness said he would rather see the city spend money on projects that would benefit the entire community, such as extended trails through the new subdivision, than on roads and sewers. The mayor said spending $1 million or more would be too much, especially considering the city will be doing multimillion-dollar road projects along State Road 44 in the next five years.

Board members Bob Huechan, Jay Goad and Richard Wertz said they are undecided on the proposal.

Goad thinks that the city needs more high-end housing but also that he had concerns about the amount of money Grimmer was asking for as well as whether the board would be setting a precedent for future subdivision developers.

If the commission decides to give Grimmer funding, that doesn’t mean the board would have to fund other developments in the future, Heuchan said. Each proposal could be handled on a case-by-case basis and considered for how it would benefit the city, he said.